Four Columbia/HCA execs face trial

CBS.MarketWatch.com

TAMPA, Fla. (AP) -- Four executives of Columbia/HCA Healthcare Corp., the nation's largest hospital chain, tried to cheat government health care programs by overbilling for services, then trying to cover up the inflated costs, the government alleges in a lawsuit that goes to trial this week.

Jury selection begins Monday in the federal suit which says the defendants, all mid-level managers at Columbia
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plotted to defraud the government of $2.8 million by submitting false Medicare, CHAMPUS and Medicaid claims to get higher reimbursements.

Medicare is a government health care program for the elderly and frail, Medicaid is government health care for the poor and CHAMPUS is a civilian health insurance program for the military.

U.S. District Judge Susan Bucklew expected to choose from a pool of 50 prospective jurors, more than the usual number since the trial is projected to last two months.

'Capital outlays'

Prosecutors allege that the defendants claimed certain expenses at Fawcett Memorial Hospital in Port Charlotte, Fla., were "capital outlays" when they knew some charges should have been listed as administrative and general expenses.

The government reimburses capital outlays at a higher rate than administrative expenses. The claims brought in $2.8 million, prosecutors said.

The executives were accused of misleading Columbia's lawyers, setting up a reserve bank account to pay back the money if the disguised claims were exposed and trying to come up with ways to throw an auditor off track - even if it meant offering the auditor a job.

The charges were the first to come out of a sweeping government probe of the giant Nashville-based hospital chain, which took in $18.7 billion in revenue in 1998.

Named as defendants in an indictment handed up June 25, 1997, were Robert Whiteside of Brentwood, Tenn., a senior executive in the reimbursement department; Jay Jarrell of Fort Myers, chief executive officer of the southwest Florida division and Michael Neeb of Jacksonville, chief financial officer of Columbia's northern Florida operations.

Allegations expanded

In July 1998, a superseding seven-count indictment expanded allegations against the three executives and added as a defendant Carl Lynn Dick of Orlando, chief financial officer at Columbia's central Florida division. He was charged with conspiracy.

Whiteside, Jarrell and Neeb are charged with conspiracy to defraud, making false statements and planning to deceive or obstruct a federal auditor.

Each count carries a penalty of up to five years in prison and a maximum fine of $250,000.

An affidavit unsealed in October 1997 showed prosecutors believed the Columbia executives tried to cover up a wide-ranging fraud scheme by:

- Adding blood tests and other tests that either were not ordered or not necessary;

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